Federal Reserve Chair Jerome Powell downplayed dissenting votes in Wednesday’s rate-cut decision, but meeting details reveal deepening internal divisions. Powell pushed through a 25-basis-point cut despite opposition. Several regional Fed presidents—who participated in discussions but lacked voting rights this year—also opposed the move. These rifts may foreshadow challenges in 2026, when a new chair could face even greater difficulty forging consensus.
Only two policymakers—Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee—formally dissented, favoring unchanged rates. Another dissenter, Fed Governor Christopher Waller, continued advocating for deeper cuts. Other objections were voiced through unofficial channels.
“This is highly unusual. In over a decade at the Fed, I’ve never seen this,” said Philadelphia Fed President Patrick Harker, who retired in June. The Fed’s quarterly rate projections revealed six officials believe the benchmark rate should remain at 3.75%-4% by end-2025—unchanged from pre-cut levels—signaling their opposition. With many dissenters lacking 2025 votes, some observers dubbed the high-rate forecasts “silent dissent.”
Harker remarked, “I’d have been among the silent dissenters. This cut was a mistake.”
Another clue emerged in Fed documents. Beyond voting members, regional Fed bank boards—comprising business leaders—can submit separate rate recommendations, which historically align with the central bank’s moves. This time, only 4 of 12 regional banks endorsed cuts, implying 8 presidents may have resisted.
Powell acknowledged at the press conference that conflicting economic signals—inflation still above the 2% target and emerging labor-market softness—made disagreements inevitable. “Many see elevated risks on both unemployment and inflation. With one tool, you can’t tackle both. It’s tricky,” he said.
However, with policymakers increasingly willing to dissent—formally or silently—whoever succeeds Powell in 2026 (including top contender Kevin Hassett, director of the White House National Economic Council) may struggle to steer the FOMC.
“Chair Powell’s long tenure commands respect at the FOMC. Yet even he faces three dissenters now. It’s hard to imagine a new chair securing consensus more easily,” said Calvin Tse, U.S. strategist at BNP Paribas.
The Fed’s hurdles aren’t insurmountable. Fresh data could shift the landscape. While median projections suggest one 2026 cut, markets price in two. Thursday’s spike in jobless claims (up 44,000 to 236,000, the largest pandemic-era rise) may validate some policymakers’ labor-market concerns, despite the metric’s volatility. Recent layoffs at
Officials will receive critical labor and inflation data before their late-January meeting, including November and December figures (some October releases are delayed).
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